Eastman Chemical Company and Solutia Inc. announced that they have entered into a definitive agreement, under which Eastman will acquire Solutia, a global leader in performance materials and specialty chemicals. The transaction is expected to close in mid-2012.

Under the terms of the agreement, Solutia stockholders will receive $22.00 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock.

Based on closing prices on Jan. 26, 2012, Solutia shareholders will receive cash and stock valued at $27.65 per Solutia common share, representing a premium of 42 percent and a total transaction value of approximately $4.7 billion, including the assumption of Solutia’s debt.

“The acquisition of Solutia is a significant step in our growth strategy and one that I am confident will strengthen Eastman as a top-tier specialty chemical company with strong, stable margins,” said Jim Rogers, chairman and CEO of Eastman. “The addition of Solutia will broaden our geographic reach into emerging geographies, particularly Asia Pacific, establish a powerful combined platform with extensive organic growth opportunities, and expand our portfolio of sustainable products, all of which are consistent with our growth strategy.”